NEWSLETTER of May 23, 2025

The following content has been added at finexpert:

Goldman Sachs
25 YEARS ON; LESSONS FROM THE BURSTING OF THE TECHNOLOGY BUBBLE
Twenty-five years ago, stock markets around the world collapsed as the technology bubble finally burst. Given the extraordinary rise in technology stocks in recent years, particularly in the US, and their correction so far in 2025, Goldman Sachs Research explores the parallels and differences between the two periods and examines what lessons can be learned. >more

S&P Global
EUROPE M&A BY THE NUMBERS: Q1 2025
The European M&A market experienced a slight decline in Q1 2025, with both deal volumes and deal sizes showing a dip compared to the previous quarter. Transaction values saw a modest increase of 3.6% year-over-year. However, the total number of deals dropped by 5%, from 3,141 deals in Q1 2024 to 2,981 deals this quarter. The largest transaction of the quarter took place in the Italian banking sector, where Banca Monte dei Paschi and Mediobanca Banca di Credito Finanziario merged in a deal valued at $13.7 billion. The United Kingdom remained the leader in both deal size and transaction volume across Europe. >more

Allianz Research
ALLIANZ TRADE GLOBAL SURVEY 2025: TRADE WAR, TRADE DEALS AND THEIR IMPACTS ON COMPANIES
The unpredictability of US trade policy has dented exporters’ confidence: 42% of exporting companies now anticipate turnover to decline between -2% and -10% over the next 12 months – compared to fewer than 5% before “Liberation Day”. Conducted across approximately 4,500 companies in China, France, Germany, Italy, Poland, Singapore, Spain, the UK and the US in two waves over March and April 2025, the Allianz Trade Global Survey reveals that close to 60% of firms expect a negative impact from the full-fledged trade war initiated by the Trump administration on 2 April, also called “Liberation Day”. >more

McKinsey & Company
DER GKV-CHECK-UP 2025: MIT INNOVATION UND DATENANALYTIK NEUE MAßSTÄBE SETZEN
In 2025, statutory health insurance providers in Germany will once again face numerous challenges, some of which have even become more acute. For example, increasing cost pressure, political reform projects and advancing digitalization have been shaping the German healthcare system for years. >more

STEERING A SHIP IN ILLIQUID WATERS: ACTIVE MANAGEMENT OF PASSIVE FUNDS
Naz Koont, Yiming Ma, Lubos Pastor, and Yao Zeng
2023
Exchange-traded funds (ETFs) are typically viewed as passive index trackers. In contrast, we show that corporate bond ETFs actively manage their portfolios, trading off index tracking against liquidity transformation. In our model, ETFs optimally choose creation and redemption baskets that include cash and only a subset of index assets, especially if those assets are illiquid. Our evidence supports the model. We find that ETFs dynamically adjust their baskets to correct portfolio imbalances while facilitating ETF arbitrage. Basket inclusion improves bond liquidity in general, but worsens it in periods of large imbalance between creations and redemptions, such as the COVID-19 crisis. >more

CARBON TRANSITION RISK AND CORPORATE LOAN SECURITIZATION
Isabella Mueller, Huyen Nguyen, and Trang Nguyen
2025
We examine how banks manage carbon transition risk by selling loans given to polluting borrowers to less regulated shadow banks in securitization markets. Exploiting the election of Donald Trump as an exogenous shock that reduces carbon transition risk, we find that banks engage in regulatory arbitrage and use brown loan securitization to manage their exposure to carbon transition risk. Banks are more likely to securitize brown loans when carbon transition risk is high but keep these loans on their balance sheets when the risk is reduced. In addition, securitization enables banks to offer lower interest rates to polluting borrowers but does not affect the supply of green loans. Our findings are more pronounced among banks with low levels of capitalization, domestic banks, and banks that do not display green lending preferences. We discuss how securitization can weaken the effectiveness of bank climate policies. >more